The myelodysplastic syndromes (MDS) are characterized by cytopenias and risk of progression to acute myeloid leukaemia (AML). Most MDS patients eventually require transfusion of red blood cells for anaemia, placing them at risk of transfusional iron overload. In β-thalassaemia major, transfusional iron overload leads to organ dysfunction and death; however, with iron chelation therapy, organ function is improved, and survival improved to near normal and correlated with the degree of compliance with chelation. In lower-risk MDS, several nonrandomized studies suggest an adverse effect of iron overload on survival and that lowering iron with chelation may minimize this impact. Emerging data indicate that chelation may improve organ function, particularly hepatic function, and a minority of patients may have improvement in cell counts and decreased transfusion requirements. While guidelines for MDS generally recommend chelation in selected lower-risk patients, data from nonrandomized trials suggest iron overload may impact adversely on the outcome of higher-risk MDS and stem cell transplantation (SCT). This effect may be due to increased transplant-related mortality, infection and AML progression, and preliminary data suggest that lowering iron may be beneficial in this patient group. Other areas of active and future investigation include optimizing the monitoring of iron overload using imaging such as T2* MRI and measures of labile iron and oxidative stress; correlating new methods of measuring iron to clinical outcomes; clarifying the contribution of different cellular and extracellular iron pools to iron toxicity; optimizing chelation by using agents that access the appropriate iron pools to minimize the relevant clinical consequences in individual patients; and incorporating measures of quality of life and co-morbidities into clinical trials of chelation in MDS. It should be noted that chelation is costly and potentially toxic, and in MDS should be initiated after weighing potential risks and benefits for each patient until more definitive data are available. In this review, data on the impact of iron overload in MDS and SCT are discussed; for example, several noncontrolled studies show inferior survival in patients with iron overload in these clinical settings, including an increase in transplant-related mortality and infection risk. Possible mechanisms of iron toxicity include oxidative stress, which can damage cellular components, and the documented impact of lowering iron on organ function with measures such as iron chelation therapy includes an improvement in elevated liver transaminases. Lowering iron also appears to improve survival in both lower-risk MDS and SCT in nonrandomized studies. Selected aspects of iron metabolism, transport, storage and distribution that may be amenable to future intervention and improved removal of iron from important cellular sites are discussed, as are attempts to quantify quality of life and the importance of co-morbidities in measures to treat MDS, including chelation therapy.